Subrata Majumder
Uncertainty surrounding the USA-China tariff war pause, coupled with a marginal reduction of tariffs by 10 percent are unlikely to arrest the attempt by India-China to reduce tensions. The escalation of the tariff war between the USA and China leased out an opportunity for reduction in India-China tensions, given the fact that both are haunted by high US tariffs – India by 50 percent and China by 47 percent (after the pause).
China is one of the top two trading partners of India. So is the USA. The difference between China and the USA behemoth in trade partnership with India is that while China is the biggest source for imports, the USA is the biggest destination of exports for India.
Nevertheless, though China is the trigger for the widening trade deficit of India, it also underscored as the backbone for the success of India’s manufacturing industry and exports. A common proverb states, “Make in the India relies on Make in China”. The success of new industries like electronics and the pharmaceutical industries are the cases in point.
Historically, India-China relations have been characterized in paradox. Politically it remains thorny. Trade and economically, it emerges as the backbone for new industries growth and export. Political tension thrives due to repeated Chinese infiltration in Indian borders and trade relations surged owing to large imports from China. In the light of USA-China trade relation rising volatile during the second term of Donald Trump presidency due to the threatening of high tariff on China, a new wave of opportunity underscores for India-China trade and investment relations.
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